How to Measure Living Standards and Productivity

This paper sets out a general algorithm for calculating true cost-of-living indices or true producer price indices when demand is not homothetic, i.e. when not all expenditure elasticities are equal to one. In principle, economic theory tells us how we should calculate a true cost-of-living index or Konüs price index: first estimate the consumer's expenditure function (cost function) econometrically and then calculate the Konüs price index directly from that. Unfortunately this is impossible in practice since real life consumer (producer) price indices contain hundreds of components, which means that there are many more parameters than observations. Index number theory has solved this problem, at least when demand is homothetic (all income elasticities equal to one). Superlative index numbers are second order approximations to any acceptable expenditure (cost) function. These index numbers require data only on prices and quantities over the time period or cross section under study. Unfortunately, there is overwhelming evidence that consumer demand is not homothetic (Engel's Law). The purpose of the present paper is to set out a general algorithm for the nonhomothetic case. The solution is to construct a chain index number using compensated, not actual, expenditure shares as weights. The compensated shares are the actual shares, adjusted for changes in real income. These adjustments are made via an econometric model, where only the responses of demand to income changes need to be estimated, not the responses to price changes. This makes the algorithm perfectly feasible in practice. The new algorithm can be applied (a) in time series, e.g. measuring changes over time in the cost of living; (b) in cross section, e.g. measuring differences in the cost of living and hence the standard of living across countries; and (c) to cost functions, which enables better measures of technical progress to be developed.consumer price index, Konüs, cost of living, measurement of welfare change, Quadratic Almost Ideal Demand System, producer price index, homothetic, Productivity

Chain Indices of the Cost of Living and the Path-Dependence Problem: An Empirical Solution

This paper proposes an empirically feasible method for correcting the path-dependence bias of chain indices of the cost of living. Chain indices are discrete approximations to Divisia indices and it is well known that the latter are path-dependent: the level of a Divisia index is affected not just by the level of prices at the two endpoints but also by the path between the endpoints. It is also well-known that a Divisia index of the cost of living is path-independent if and only if all income elasticities are equal to one, a restriction that is decisively rejected by studies of consumer demand. In theory, the true cost of living index (or Konüs price index) could be derived by estimating the expenditure function. But this seems impractical due to data limitations: the number of independent parameters rises roughly in proportion to the square of the number of commodities and consumer price indices contain hundreds of items. This paper shows how this problem can in fact be overcome empirically using a flexible model of demand like the "Quadratic Almost Ideal Demand System". The proposed method requires data only on prices, aggregate budget shares and aggregate expenditure. The method is applied to estimate Konüs price indices for 70 products covering nearly all the UK's Retail Prices Index over 1974-2004, with each year in turn as the base. The choice of base year for utility is found to have a significant effect on the index, even in the low inflation period since 1990.Index number, cost of living, Divisia, Chain, Path-dependence, Almost Ideal Demand System

Ex Post Versus Ex Ante Measures of the User Cost of Capital

When doing growth accounting, should we use ex post or ex ante measures of user costs to calculate the contribution of capital? The answer, based on a simple model of temporary equilibrium, is that ex post is better in theory. In practice researchers usually calculate ex post user costs by assuming that the rate of return is equalised across assets. But this is only true if expectations are correct. A numerical example shows that either ex ante or ex post can be closer to the true measure, depending on the parameters. I propose a hybrid method that makes use of elements of both approaches. I test this and the other methods using data for 31 UK industries.User cost, capital, ex post, ex ante, growth accounting

Sexual violence: Raising the conversations, a literature review

This literature review is intended to contribute to efforts to raise awareness and conversations around sexual violence. It is focused on men’s sexual violence against adolescent and adult women. We begin our review by briefly considering the definition of sexual violence, its prevalence, and its impact. In Section 2, following the lead of public health theorists, we use an ecological framework to discuss factors which contribute to – or are protective of – sexual violence. That is, we adopt a multi‐level approach, considering risk factors at societal, community, relationship and individual levels. Although we look at each of these levels in turn, as will become evident, it is also important to consider the interactions between levels. In Section 3, we review evaluations of various attempts to prevent sexual violence. Mostly, these evaluations have focused on individual level prevention efforts: prevention at community and societal levels seem to have received little attention from evaluators. Nevertheless, there are some useful lessons to be gained from the evaluation literature. In section 4, we attempt to integrate the material considered in sections 2 and 3 into a framework proposed by the (US) National Sexual Violence Resource Center (Davis, Parks, & Cohen, 2006). Consistent with a public health approach, the Spectrum of Prevention is a multi‐level model

Seaside sestina: A Folkestone romance

These poems are based on my research into the history of the Folkestone Free Library (https://www.kent-maps.online/19c/19c-folkestone-free-library/) in Kent and the seaside romances readers might have accessed in the newspaper reading room. The library regularly featured in the local press and had a close relationship with the nearby Holbein Visitors’ List and Folkestone Journal. In this sense the poems are intended to complement my book Down From London: Seaside Reading in the Railway Age (Liverpool UP, 2022). However they also respond to the threatened closure of the library, following flood damage in December 2022. A local campaign to save the library is currently underway

Ouida and Victorian popular culture

Review of Jane Jordan & Andrew King (eds.). Ouida and Victorian Popular Culture. Farnham, UK & Burlington, VT: Ashgate, 2013

“licking the chops of memory”: plotting the social sins of Jekyll and Hyde’

Dr Jekyll and Mr Hyde is hierarchical in its very title – alphabetically Hyde precedes Jekyll, but Jekyll’s superior education and culture are associated with social status where Hyde’s ‘Mr’ is a courtesy title often hedged in with demonic or animalistic terms. But despite the division insisted on in the title, Jekyll’s wilful complicity in the fate that overtakes him is suggested in a series of clues, ranging from his symbolic association with vivisection to the ostentatious exclusion of a female voice (typically the source of spiritual guidance or inspiration in Victorian fiction). As Hyde engages in an ascending scale of brutal acts, beginning with the assault of a child, the middle class male peer group attempts to exculpate or protect Jekyll from association with this rebarbative and criminal figure. But following the murder of Sir Danvers Carew, the climactic discovery of Hyde’s body provides the final evidence against Jekyll himself – in rejecting the possibility of religious salvation he has deliberately chosen the evil that his final statement presents as the ‘assault’ of an ungovernable temptation

Found in the library

These poems are based on my research into the history of the Folkestone Free Library (https://www.kent-maps.online/19c/19c-folkestone-free-library/) in Kent and the seaside romances readers might have accessed in the newspaper reading room. The library regularly featured in the local press and had a close relationship with the nearby Holbein Visitors’ List and Folkestone Journal. In this sense the poems are intended to complement my book Down From London: Seaside Reading in the Railway Age (Liverpool UP, 2022). However they also respond to the threatened closure of the library, following flood damage in December 2022. A local campaign to save the library is currently underway